Do you want to know how to negotiate private student loans? If this is true, then you are on the right page. In a bit, I will be discussing with you everything that you need to know in regard to negotiating your private student loans.
How to Negotiate Private Student Loans
Defaulting on your private student loans is very serious and can also be costly. The act alone can destroy your credit score and also lead to delays in loan applications in the future, wage garnishment as well as many legal issues, which you really do not want.
So with that being said, can you negotiate a private student loan debt that is already in collection? You have many options when it comes to paying off your loan, just so you know. The settlement of student loans is simply the process of renegotiating or even settling your student loan debt. And soon, I will be covering how you can find settlement options, which get to qualify for it as well as the pros and cons of settlement.
Is It Possible To Negotiate a Student Loan Payoff?
It is very possible to negotiate student loan payoffs regardless of the type of your loan. You just may be able to negotiate private and even federal student loans, but one thing you should know is that the process involved is not easy. The outcome however may vary depending on the said loan as well as your lender.
In regards to private student loans, it is possible to negotiate a reduced payoff amount, but at most times only if the loan in question is in default. Many private student loans enter default if payments have not been made in 90 days or even more. Certain lenders in the market may just be willing to accept a negotiated settlement even if your loan has not yet entered default, but they however might request immediate payment in the event that the loan is current.
A lawyer that is brewed for situations like this or a debt settlement company may be your best bet in helping you come up with a suitable agreement that will benefit both sides at the end of the day.
The Pros and Cons of Negotiating a Settlement for Student Loans
Before deciding on whether a settlement is the right step for you in regard to private student loans, then you should, first of all, consider the pros and cons associated with it.
- Save your credit score
- Avoidance of bankruptcy
- Get to settle for an amount that is less than what you owe originally
- Stop the collections process finally
- Implications with tax
- You are very much likely going to pay high fees
- Your credit at the end of the day may still be affected
How to Negotiate a Student Loan Payoff
Before you proceed to negotiate for a student loan payoff, you probably should know that the process can be long, hectic, and really complex. Generally, you will go through the following steps in negotiating for a private student loan payoff;
- Gather documents that are related to your student loans such as tax returns, pay stubs, rent or even mortgage payments, medical bills in the event that there is any, child care expenses, and any other type of document that will demonstrate financial hardship.
- Make contact with your loan provider.
- Make research on your negotiation options as you can get a lawyer that specializes in cases like this, hire a debt settlement company or you can even make the negotiations yourself to save costs.
- Prepare and then submit your negotiation plan.
- Lastly, make your payment.